Sunday 23 September 2001 05.27 EDT
First published on Sunday 23 September 2001 05.27 EDT

When auctioneer Guy Loudmer sold 54 paintings at auction in Paris in 1990, it was described as 'the sale of the century'. Never before had such a remarkable collection of masterpieces by the likes of Picasso, Modigliani, Dubuffet, Derain and Miró come under the hammer at the same time.

The sale realised 509 million francs (£49m) - a sum never before or since equalled in France - and made Loudmer one of the top auctioneers at the respected Drouot house.

But 11 years later, the real story of the auction can be told, involving embezzlement, paper companies, and the exploitation of two elderly art lovers who entrusted their collection's disposal to Loudmer.

Detectives have unravelled Loudmer's complicated machinations behind the sale and finally revealed a system of dubious auctioneering practices that Loudmer claimed were commonplace in Paris at the time.

The story starts at the end of the Eighties when two Paris gallery owners, husband and wife Lucien and Marcelle Bourdon, nearing the end of their lives, decided to sell their remarkable modern art collection. Their aim was to donate the proceeds to charities and give two of the most famous pictures in their collection to French museums.

The Bourdons' apartment was filled with a collection of works that they had found impossible to sell on their own, so the pair approached Loudmer, who specialised in primitive and modern French art.

Nicknamed the 'Patton' of the French Compagnie des Commissaires-Priseurs (or Auctioneers' Association) and noted for being both charismatic and tyrannical, the sharp-suited, cigar-smoking Loudmer persuaded the couple to set up the Bourdon Foundation.

The disposal of the collection was controversial at the time, because the Bourdons were widely rumoured to have acquired many of the pictures during the Second World War, and some of the works were said to have originally been seized by the Nazis from Jewish families.

Loudmer set himself up as treasurer of the Bourdon Foundation and received nearly 60m francs in fees. Loudmer claimed that the huge fees were warranted by the complexity of the disposal, but a Paris court last week convicted him of misappropriating the funds by demanding exorbitant fees from the Bourdons. Normally a French auctioneer can expect a 6 per cent commission on a sale, but Loudmer charged 10 per cent.

Monsieur Bourdon, aged 93, told the court that he had never suspected that he had been overcharged and added: 'But I don't really understand figures at all.'

A Paris court ruled last week that Loudmer was guilty of misappropriating the funds by overcharging the Bourdons and, more seriously, of setting up a network of paper companies and fictitious sales to maximise the profit to himself.

Loudmer, 67, was given an 18-month suspended jail sentence and fined 500,000 francs for 'grave abuse of confidence'. He has already served five months in jail while awaiting trial.

Along with five others, Loudmer was charged with embezzlement and possessing stolen goods. Among his fellow accused was his son Philippe, who in 1997 fled to Israel after withdrawing 400,000 francs from the family firm just before the scandal broke. He was last week convicted in absentia.